Pipavav Defence sells strategic stake to US firm

Shares of Pipavav Defence and Offshore Engineering Co. Ltd. rallied on Nov. 22 after the company said that its Board of Directors had approved issue of up to 81,880,000 shares of Rs. 10 each to an international strategic investor in one or more tranches. The shares will be issued to the international strategic investor at a price not less than Rs. 110 per share or price to be determined as per the formula prescribed by market regulator SEBI. The share sale is subject to the approval of the shareholders of the Company and other requisite approvals. The investment will be a long-term strategic investment in the Company. The investor will initially subscribe to 5% of the paid up capital of the company and within specified time will increase its holding up to 10% of the paid-up capital of the company. The investor is a leading and externally reputed global conglomerate with strong interest in the defence sector. The investor will bring in critical technology required for the manufacture of complex and critical equipment, systems required by the armed forces. The investor will have a right to nominate one director on the Board of the company.